First BanCorp (FBP) Q2 2024 earnings summary

Executive summary

• Net income for Q2 2024 was $75.8 million ($0.46 per diluted share), up from $73.5 million ($0.44 per share) in Q1 2024 and $70.7 million ($0.39 per share) in Q2 2023, with ROAA at 1.61% and ROACE at 20.80%.

• Adjusted pre-tax, pre-provision income rose to $113.1 million, up from $110.5 million in Q1 2024, driven by net interest income and lower expenses.

• Total loans grew 2.4% annualized to $12.4 billion, with broad-based growth across all business segments and regions.

• Core deposits increased by $132 million, with non-interest-bearing accounts now 34% of total deposits and growth in all regions.

• 100% of earnings were returned to shareholders via buybacks and dividends, totaling over $76 million in Q2 2024.

Financial highlights

• Net interest income increased by $3.1 million to $199.6 million, with net interest margin rising 6 basis points to 4.22% sequentially.

• Provision for credit losses was $11.6 million, down from $22.2 million in Q2 2023, reflecting improved economic outlook.

• Non-interest income was $32.0 million, down $2.0 million sequentially, mainly due to lower insurance commission income.

• Non-interest expenses decreased to $118.7 million from $120.9 million in Q1 2024, aided by a $2.3 million OREO gain and lower compensation costs.

• Efficiency ratio improved to 51.2% from 52.5% in Q1 2024.

Outlook and guidance

• Guidance for mid-single-digit loan growth and net interest margin expansion is maintained for 2024, supported by commercial construction and auto loan activity.

• Efficiency ratio guidance remains at 52% for 2024, with ongoing investments in technology and facilities.

• Management remains focused on disciplined capital management, operational efficiency, and leveraging strong capital to grow market share.

• Effective tax rate for 2024 is projected around 24%.

• New $250 million repurchase program approved, to be executed through Q4 2025.